System and method for transponder-enabled account transactions

ABSTRACT

A transponder-initiated transaction system is electromagnetically coupled to an account transponder device at the point of sale. The account transponder device may be embedded within a watch, key chain or other personal article for convenience or affinity. The transponder device may communicate account information to an RF-enabled point of sale device, enabling transactions to take place without resort to remote data processing facilities. In other embodiments partial or complete account information may be accessed or stored at co-located or remote sources. New account registrants may access a Web site to enter a transponder ID and activate a new account, which may be a credit account, debit account, cash account, special purpose vending account, or other types of accounts.

FIELD OF THE INVENTION

[0001] The invention relates to the field of electronic commerce, andmore particularly to the use of transponder-activated accounttransactions at point of sale or other locations.

BACKGROUND OF THE INVENTION

[0002] The use of electromagnetically-coupled transducers for commercialtransaction processing has become increasingly popular in recent times.The advent of compact, inexpensive electronics, transponder-equippedpoint of sale equipment, and attendant information processing assetshave enabled a variety of vendors to offer account-linked transactionsystems. Those systems include, for example, subway or othertransportation devices, telephone calling devices, and others such asthe SpeedPass™ offered by Mobil Corp. for gasoline point of saletransactions. In that and other systems, a receiver emitselectromagnetic signals to a device in proximity to a gasoline pump overradio frequencies (RF), activating an embedded transponder within thetraction device. The transaction device is identified by some sort ofidentification information, which information is then relayed from thepoint of sale to an offsite information processing facility. However,these types of distributed systems suffer from more than onedisadvantage.

[0003] For one, transactions made according to that technology requirethat separate offsite computing facilities be accessed, since thetransponder in encoded with information identifying the transponder butnot the account information necessary to complete the transaction.Processing times and time to completion of transactions are thereforeincreased, and the expense of linking and maintaining informationprocessing facilities to service the point of sale request issignificant. Moreover, the initiation of new accounts to use suchwireless vending points requires backend processing facilitates to entera new user's account to the remote data processing facility, as well asto encode and associate the transponder with particular new accounts.More streamlined, convenient and flexible transaction technology isdesirable.

SUMMARY OF THE INVENTION

[0004] The invention overcoming these and other drawbacks in the artrelates to a system and method for transponder-activated transactions,generally involving the presentation and sensing of anelectromagnetically coupled transponder to an RF-enabled point of salesystem. In the practice of the invention, the transponder may bepreferably encoded with not merely identifying or serializinginformation, but also account information which may be used to authorizeor record transactions at the instant of sale, so that remote dataprocessing may not be necessary. Users of the transponder of theinvention may link the device to more than one type of account, andactivate the transponder using Web or other network-enabled interfaces.

BRIEF DESCRIPTION OF THE DRAWINGS

[0005] The invention will described with reference to the accompanyingdrawings, in which like elements are referenced by like numerals.

[0006]FIG. 1 illustrates an overall transaction architecture accordingto one embodiment of the invention.

[0007]FIG. 2 illustrates an overall architecture of the inventionaccording to a second embodiment of the invention.

[0008]FIG. 3 illustrates an activation architecture for the initiationof user accounts according to the invention.

[0009]FIG. 4 illustrates a flowchart of transaction processing accordingto the invention.

DETAILED DESCRIPTION OF PREFERRED EMBODIMENTS

[0010] As illustrated in FIG. 1, in a first embodiment of the invention,an overall point of sale architecture includes a transponder 102 whichcommunicates via an RF link 104 to a receiver 106. The transponder 102may be or include any of several known electromagnetically coupleddevices, generally activated by proximity to an RE-enabled receivingunit, such as receiver 106. Transponder 102 may, for instance, containan electromagnetic coil antenna for inductive coupling to receiver 106,thereby being energized with small but sufficient electric current toactivate embedded electronics within transponder 102. Those electronicsmay include memory such as CMOS memory, logic gates, filters forisolating discrete transmission frequencies and other elements known inthe art In one embodiment, transponder 102 may be programmable and ableto receive updated programmable instructions via RF link 104, as well asto have electronic memory erased or updated during transactions.Receiver 106 may include an electromagnetic antenna to couple withtransponder 102, generally within the range of a few feet of the device.

[0011] In the embodiment illustrated in FIG. 1, the receiver 106 isconnected to a point of sale (POS) device 108 for conducting acommercial or other transaction. For instance, the point of sale device108 may be or include any of several commercially known electronic cashregisters or related transaction processing equipment, such as point ofsale terminals manufactured by Sharp Corp. or others. In one embodimentof the invention, transponder 102 may be embedded within a personalarticle for convenience, aesthetic and affinity purposes. In thatregard, the invention has been integrated in one implementation within afully functional watch manufactured by the Swatch Corporation. Embeddingin other personal articles, such as key chains, pagers, clothing orother items is also possible.

[0012] In the operation of the invention, a user who has subscribed tothe account system of the invention may approach the receiver 106 at thepoint of sale device 108 to initiate and complete a purchase or othertransaction, such as at a restaurant or grocery market checkout line, orother points of sale. In the embodiment illustrated in FIG. 1,transponder 102 contains an encoded transponder ID 110, which may forinstance be a 5-digit number or other identifying information. In thisembodiment, transponder 102 may also store an account table 112 directlyrecording account information for the subscribed user of the transponder102. The account table 112 may be or include, for instance, anindication of an account number, balance, limit and other informationfor a debit account, a cash account, a credit card account, specialpremises account for internal use such as by employees, or other accountinformation associated with users of the system.

[0013] In the implementation of this embodiment of the invention,receiver 106 is configured to receive the account table 112 and apply anamount being executed at the point of sale device 108 to the accountreflected within the account table 112. For instance, a patron who hassubscribed to an account according to the system of the invention mayapproach receiver 106 in a restaurant line and wave a watch or otherarticle containing transponder 102 in proximity of the receiver 106.When transponder 102 comes within range of receiver 106, transponder 102may be inductively coupled to the coils of an electromagnetic antennawithin receiver 106 inducing electrical energy within transponder 102,to establish the RF link 104 with the receiver 106. Upon activation oftransponder 102 and radiation of transponder ID 110 to the receiver 106,the receiver 106 may respond with an acknowledge signal to thetransponder 102. The point of sale device 108 may indicate on a displayscreen or otherwise that a transaction is ready to be commenced. Oncethe point of sale device 108 generates total amount due for thetransaction, the receiver 106 may interrogate transponder 102 to obtainaccount table information from account table 112 for application to thesale.

[0014] For instance, if a patron has purchased a meal in a restaurantline at point of sale device 108, the total purchase price may bevalidated against available credit, available cash or otheraccount-specified balances within account table 112 for completion ofthe transaction. Conversely, if the amount of the transaction cannot bevalidated against account table 112, the point of sale device 108 mayindicate “cash required” or another message that transponder validationor authorization has failed. If the transaction amount is validated,receiver 106 enters the transaction amount, recalculates an accountbalance for storage within account table 112 and transmits the revisedaccount table 112 information over the RF link 104 to the transponder102. A transaction completion signal may be emitted by receiver 106,which in one embodiment may turn off or decouple the transponder 102 viaRF link 104.

[0015] Among other advantages, because the receiver 106 and othertransaction elements do not need to resort to offsite transactionprocessing, conduct of the transaction from initiation through approvaland completion are completed quickly, often virtually instantaneously toa subscriber at the point of sale. It may be noted that receiver 106 andpoint of sale device 108 may be configured to execute a variety of othertypes of transactions, such as retail checkouts of books, movies orother media, and other transaction events.

[0016] In terms of new accounts registration as illustrated in FIG. 3,in the invention a network-based activation architecture may beadvantageously employed. As shown in the figure, a new user may access aclient work station 118 connected via communications link 120 to aregistration server 122. The communications link 120 may be, include oraccess any one or more of, for instance, the Internet, an intranet, aPAN (Personal Area Network), a LAN (Local Area Network), a WAN (WideArea Network) or a MAN (Metropolitan Area Network), a fame relayconnection, an Advanced Intelligent Network (AIN) connection, asynchronous optical network (SONET) connection, a digital T1, T3 or E1line, Digital Data Service (DDS) connection, DSL (Digital SubscriberLine) connection, an Ethernet connection, an ISDN (Integrated ServicesDigital Network) line, a dial-up port such as a V.90, V.34 or V.34bisanalog modem connection, a cable modem, an ATM (Asynchronous TransferMode) connection, or FDDN (Fiber Distributed Data Networks) or CDDI(Copper Distributed Data Interface) connections.

[0017] Communications link 120 may furthermore be, include or access anyone or more of a WAP (Wireless Application Protocol) link, a GPRS(General Packet Radio Service) link, a GSM (Global System for MobileCommunication) link, a CDMA (Code Division Multiple Access) or TDMA(Time Division Multiple Access) link such as a cellular phone channel, aGPS (Global Positioning System) link, CDPD (cellular digital packetdata), a RIM (Research in Motion, Limited) duplex paging type device, aBluetooth radio link, or an IEEE 802.11-based radio frequency link.Communications link 120 may yet further be, include or access any one ormore of an RS-232 serial connection, an IEEE-1394 (Firewire) connection,an IrDA (infrared) port, a SCSI (Small Computer Serial Interface)connection, a USB (Universal Serial Bus) connection or other wired orwireless, digital or analog interface or connection.

[0018] The registration server 122 may be or include, for instance, aworkstation running the Microsoft Windows™ NT™, Windows™ 2000, Unix,Linux, Xenix, IBM AIX, Hewlett-Packard UX, Novell Netware™, sunMicrosystems Solaris™, OS/2™, BeOS™, Mach, Apache, OpenStep™ or otheroperating system or platform.

[0019] The registration server 122 may communicate with clientworkstation 118 to receive preassigned information related totransponder 102, such as transponder ID 110 which may be printed bysticker on a watch or other article housing the device, for entry into adatabase 126 within registration server 122 and the setting up of anaccount. The account may illustratively include or be more than one typeof account 124 a . . . 124 n, such as cash accounts, debit accounts,credit card accounts, special purpose vending accounts, telephone cardaccounts, or others. The registration server 122 may validate thetransponder ID 110, and interrogate a new subscriber at client workstation 118 to identify or select which one or more of accounts 124 a .. . 124 n the user wishes to associate with the transponder 102.

[0020] For instance, the registration 122 may accept a preexistingcredit card number for registration with the transponder 102 andexecution of future transactions. Once new account information isestablished, the registration server 122 may communicate via networkconnection to receiver 106 to update subscriber registration tableswithin the database 126, receiver 106, point of sale device 108 or otherassociated hardware to authorize transactions at the point of sale. Thepaperwork, delay, possibility for error and other drawbacks ofpaper-based back end account registration is thereby avoided.

[0021] A second illustrative embodiment of the invention is shown inFIG. 2, generally involving a processing architecture similar to that ofFIG. 1. In this embodiment, a transponder 102 again communicates via RFlink 104 with receiver 106 to effectuate point of sale or othertransactions. However, in the embodiment of FIG. 2 a portion or all ofaccount table 112 or other information stored in transponder 102 in thefirst embodiment may be offloaded to economize on the necessaryelectronics, power consumption and other properties of transponder 102.In the embodiment illustrated in FIG. 2, the point of sale device 108 isadditionally connected to a transaction server 116 via communicationslink 114, for the purpose of authorizing in whole or in parttransactions presented for payment using transponder 102. Communicationslink 114 may be, include or access communications resources similar tocommunications link 120.

[0022] In this embodiment, part or all of the information of accounttable 119 may be stored in hard disk or other storage of transactionserver 116. Transaction initiation begins in the same manner as theembodiment illustrated in FIG. 1, however, after acknowledgments areexchanged between point of sale device 108 and transponder 102 and atransaction is set up, the point of sale device 108 may communicate withtransaction server 116 to validate a transaction amount or otherinformation against account information stored in the transaction server116.

[0023] While this implementation involves additional hardware andcommunications link 114, if transaction server 116 is co-located withthe point of sale device 108, such as in a restaurant or retail outlet,communication delays may be minimal. Furthermore if the transactionserver 116 is dedicated to processing transactions only at the site ofpoint of sale device 108 or closely grouped facilities, processingburdens may be comparatively modest In another embodiment of theinvention, transaction server 116 may communicate with remote creditfile databases or other information resources before authorizing orcompleting a transaction initiated over REF link 104 at receiver 106,when circumstances may permit some execution delay to be acceptable.Alternatively, in another embodiment of the invention the point of saledevice 108 may perform a preliminary authorization for transactionspresented at the receiver 106, to collect and temporarily storetransactions, for instance over 2 or 3 hour periods, for batchprocessing remotely via transaction server 116. Since the majority oftransactions typically reconcile without difficulty, this implementationpermits more-immediate completion while still checking on accountvalidations at frequent intervals.

[0024] Overall transaction processing is illustrated in the flowchart ofFIG. 4. In step 202, processing begins. In step 204, the receiver 106 ispresented with transponder 102 within range of electromagnetic coupling,such as inductive coupling. In step 206, transponder 102 is activated,for instance by inductive energization of its circuitry. In step 208transponder 102 may communicate transponder ID 110, which the receiver106 acknowledges with an acknowledge signal over RF link 104 in step210.

[0025] In step 212, transaction information such as purchase amount isentered at point of sale device 108, for instance by a check out clerkor other attendant. In step 214, transaction table 112 or other accountinformation may be interrogated to determine whether account balances orother account parameters permit the pending transaction at the point ofsale device 108. If the transaction is not validated, in step 216 a“cash required” or other message is signaled at point of sale device108, and processing proceeds to step 224 whole processing ends.

[0026] If the account to be applied to the pending transaction isvalidated at step 214, in step 218, the point of sale device 108 andreceiver 106 communicate with transponder 102 to indicate transactionacceptance, and modify information within account table 112 ifappropriate. In step 220, an end of transaction signal is sent totransponder 102 and in step 222, transponder 102 decouples from thereceiver 106. In step 224, processing ends.

[0027] The foregoing description of the system and method fortransponder-activated transactions is illustrative, and variations inconfiguration and implementation will occur to persons skilled in theart. For instance, while transponder 102 has been described aselectromagnetically coupling with the receiver 106, or other types ofdetection and coupling could be used. For instance, an infrared device,a biometrically enabled or other device may be presented tocorresponding detecting apparatus at the point of sale. Similarly,transponder 102 may contain or store other types or forms of informationother than transponder ID 110 and account table 112. The scope of theinvention is accordingly intended to be limited only by the followingclaims.

What is claimed:
 1. A system for transponder-enabled transactions,comprising: a wireless interface to a transponder, the wirelessinterface for coupling to the transponder at a point of sale; and atransaction interface, communicating with the wireless interface, thetransaction interface operative to communicate with at least onenetwork-enabled transaction device to permit the execution of atransaction at the point of sale.
 2. The system of claim 1, wherein thewireless interface comprises at least one of an RF interface and aninfrared interface.
 3. The system of claim 1, wherein the transactioninterface comprises a connection to a point of sale device.
 4. Thesystem of claim 3, wherein the point of sale device comprises anelectronic sale register.
 5. The system of claim 1, wherein thetransponder stores account information which is accessible to executethe transaction.
 6. The system of claim 5, wherein the accountinformation comprises at least one of transponder ID information,account number information, account type information, account balanceinformation, and account limit information.
 7. The system of claim 1,wherein the transponder is embedded in a personal article.
 8. The systemof claim 1, further comprising a data interface to a data processingfacility, the data processing facility communicating with thetransaction device to execute the transaction.
 9. The system of claim 1,further comprising a network registration interface, the networkregistration interface permitting an account subscriber to register thetransponder with an account.
 10. The system of claim 1, wherein thetransaction interface is operable to communicate with a transactionserver to execute the transaction.
 11. A method of transponder-enabledtransactions, comprising: a) coupling to a transponder at a point ofsale via a wireless interface; and b) communicating with at least onenetwork-enabled transaction device via a transaction interface to permitthe execution of a transaction at the point of sale.
 12. The method ofclaim 11, wherein the wireless interface comprises at least one of an RFinterface and an infrared interface.
 13. The method of claim 11, whereinthe transaction interface comprises a connection to a point of saledevice.
 14. The method of claim 13, wherein the point of sale devicecomprises an electronic sale register.
 15. The method of claim 11,further comprising a step of c) storing account information which isaccessible to execute the transaction in the transponder.
 16. The methodof claim 15, wherein the account information comprises at least one oftransponder ID information, account number information, account typeinformation, account balance information, and account limit information.17. The method of claim 11, wherein the transponder is embedded in apersonal article.
 18. The method of claim 11, further comprisingcommunicating with a the data processing facility to execute thetransaction.
 19. The method of claim 11, further comprising a step of e)permitting an account subscriber to register the transponder with anaccount via a network registration interface.
 20. The method of claim11, wherein the transaction interface is operable to communicate with atransaction server to execute the transaction.